As expected by the markets, the Federal Open Market Committee (FOMC) raised the target range for the 澳洲幸运5官方开奖结果体彩网:federal funds rate by 50 澳洲幸运5官方开奖结果体彩网:basis points (bp) at its meeting on May 3-4, 2022. The new target range is 75-100 bp.

The FOMC's press release stated: "Although overall economic activity edged down in the first quarter, 澳洲幸运5官方开奖结果体彩网:household spending and business fixed investment remained strong. Job gains have been robust in recent months, and the 澳洲幸运5官方开奖结果体彩网:unemployment rate has declined substantially. 澳洲幸运5官方开奖结果体彩网:Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures."

Unanimous Vote

All nine voting members present at the meeting voted in favor of the 50 bp rate increase, including Fed Chair 澳洲幸运5官方开奖结果体彩网:Jerome Powell and Vice Chair Nominee 澳洲幸运5官方开奖结果体彩网:Lael Brainard. All nine also voted for the plan to reduce the Fed's balance sheet, as detailed below.

Critical Economic Uncertainties

The FOMC statement indicated that implications for the U.S. economy of Russia's invasion of Ukraine are "highly uncertain." It noted that the invasion and related events are adding to inflationary pressures and are likely to have a negative impact on economic activity. Additionally, the FOMC warns that COVID-related lockdowns in China are likely to worsen 澳洲幸运5官方开奖结果体彩网:supply chain disruptions.

Reducing the Fed's Balance Sheet

In a separate statement, the FOMC detailed its plan for reducing the 澳洲幸运5官方开奖结果体彩网:Fed's balance sheet. Beginning on June 1, 2022, the 澳洲幸运5官方开奖结果体彩网:System Open Market Account (SOMA) will reduce its holdings of 澳洲幸运5官方开奖结果体彩网:U.S. Treasury securities by $30 billion per month, rising to $60 billion after three months. The SOMA will reduce its holdings of 澳洲幸运5官方开奖结果体彩网:U.S. agency debt and U.S. agency 澳洲幸运5官方开奖结果体彩网:mortgage-backed securities (MBS) initially by $17.5 billion per month, rising to $35 billion per month after three months. The total monthly reduction thus will start at $47.5 billion and rise to $95 billion after three months.

The figures cited above are called "caps" by the FOMC. They represent the amounts of principal payments received in a given month that will not be reinvested by the managers of the SOMA. Any principal payments received in excess of those "caps" will be reinvested, however.